Civil Reference No. 7 of 2004
Kotra Company Limited, a licensed importer, marketer and distributor of refined petroleum products, imported consignments of petroleum products from Kenya between January 1997 and January 1999. The Tanzania Revenue Authority (T.R.A.) assessed and collected various government revenues from Kotra during this period, and later demanded an additional sum (later reduced through negotiation to Tshs.455,256,821/=, including TIPER and TPDC dues of Tshs.308,522,179/=) as unpaid windfall profit tax and other dues. When Kotra refused to pay, T.R.A. issued a distress warrant and arranged for public auction of Kotra's property, though the warrant was later raised without waiving the claim. Kotra, alleging defamation from these actions and disputing liability, sued T.R.A. in the High Court at Mwanza seeking declaratory orders that it owed no tax liability, that the demand for TIPER/TPDC dues was unlawful, a permanent injunction, refund of the sums paid, and substantial general damages for defamation. The High Court held Kotra liable for windfall tax (Tshs.106,356,093/=) but not liable for TPDC and TIPER dues, ordering T.R.A. to refund certain sums, and dismissed the defamation claim for lack of proof. Both parties appealed: T.R.A. on the TIPER/TPDC ruling and interest/costs, and Kotra by cross-appeal on the windfall tax and refund issues.
The central issue that the Court of Appeal raised suo motu was whether the High Court possessed jurisdiction to hear and determine the dispute between the parties, given that it primarily concerned the assessment and collection of tax revenue by the T.R.A. Specifically, the Court had to determine whether such a dispute fell within the exclusive original jurisdiction of the Tax Revenue Appeals Board under the Tax Revenue Appeals Act and the T.R.A. Act, thereby excluding the jurisdiction of the ordinary civil courts (the High Court).
Counsel for the appellant (T.R.A.), Mr. Switi, argued that the dispute was purely a tax dispute, and that under sections 7 and 14(1)(b) of the Tax Revenue Appeals Act and section 6 of the T.R.A. Act, only the Tax Revenue Appeals Board had original jurisdiction to entertain such disputes, with appeals lying to the Tribunal and then to the Court of Appeal. He relied on two unreported High Court decisions supporting this position and urged the Court to nullify the High Court proceedings for want of jurisdiction, without seeking costs. Counsel for the respondent/cross-appellant, Mr. Lutema, contended that section 7 of the T.R.A. Act conferred jurisdiction on the Board only for disputes arising from the scheduled revenue laws, and that Kotra's claims regarding TIPER and TPDC dues were not based on those laws but constituted "extortions and conversions" by T.R.A., outside the Board's competence. He further argued that the defamation claim could not be heard by the Board, and since the causes of action were mixed, it was impermissible to split them, thus justifying resort to the ordinary courts; he relied on KLM Royal Dutch Airlines v. Jose Xavier Ferreira (1994) TLR 230. He offered no specific argument regarding the windfall tax claim.
The Court of Appeal held that the High Court lacked jurisdiction to entertain Kotra's suit because the dispute, in substance, was a revenue levy/tax dispute concerning T.R.A.'s exercise of its powers to assess and collect revenue under laws listed in the First Schedule to the T.R.A. Act, including the Income Tax Act (under which the windfall tax was levied). Section 7 of the Tax Revenue Appeals Act vests the Board with sole original jurisdiction over such disputes, with appeals lying to the Tribunal and then the Court of Appeal, thereby impliedly (and in relevant respects expressly) excluding the jurisdiction of the ordinary civil courts. The Court found that the claim for defamation damages was merely collateral to the core tax dispute, and that Kotra's plaint had been "cleverly drafted" to bring the matter within the High Court's jurisdiction by including the defamation claim—a tactic the Court held impermissible, relying on KLM v. Ferreira, which held that claims cannot be split merely to confer jurisdiction. Since there was no proof that no appropriate remedy was available before the Board/Tribunal, and following Attorney-General v. Lohay Akonaay & Another (1995) TLR 80, the Court held that the High Court should not have entertained the suit. Accordingly, invoking its revisional powers under section 4(2) of the Appellate Jurisdiction Act, the Court of Appeal nullified, quashed, and set aside the entire High Court proceedings, judgment, and decree. No order for costs was made.
This judgment reaffirms the fundamental principle that jurisdiction is a threshold issue which can be raised suo motu by an appellate court at any stage, even where not pleaded as a ground of appeal, and that proceedings conducted without jurisdiction are a nullity, rendering any resulting judgment void. It clarifies that disputes concerning the T.R.A.'s exercise of powers to assess and collect revenue under scheduled tax laws fall within the exclusive original jurisdiction of the Tax Revenue Appeals Board and Tribunal, excluding the ordinary jurisdiction of civil courts under section 7(1) of the Civil Procedure Code. The decision also reinforces the doctrine that litigants cannot use artful or "clever" pleading—such as attaching a collateral claim like defamation—to circumvent statutory jurisdictional bars, citing KLM v. Ferreira. It further illustrates the principle, drawn from Attorney-General v. Lohay Akonaay, that courts should defer to specialized statutory tribunals unless it is shown that no appropriate remedy is available there. The case thus stands as an authority on the exclusivity of specialized tax dispute resolution mechanisms in Tanzania and the limits of ordinary civil court jurisdiction over revenue matters.
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